Business Corruption in Nicaragua

In principle, Nicaragua has a well-developed legislative framework criminalising acts of corruption. The country has signed the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) that provides a framework for further market improvements and transparency; the DR-CAFTA requires each participating government to ensure that bribery affecting trade and investment is treated as a criminal offence. However, many of Nicaragua's anti-corruption initiatives have been ineffective due to the politicisation of the institutions in charge of implementing and enforcing them. 

Corruption has thrived in Nicaragua politics for decades, and the government still faces challenges in curbing this phenomenon. A study, cited in the Bertelsmann Foundation 2014, shows that 93% of the surveyed businesspeople working in Nicaragua consider corruption an obstacle for doing business; the businesspeople suggest that corruption includes not only facilitation payments paid to the authorities when carrying out commercial activities but also the government's favouritism towards certain economic groups. Companies should be prepared to deal with corruption when interacting with the registry and permit services, for example, when applying for construction and operating permits and when obtaining access to public utilities such as electricity, water and telephone connections. Investors cite arbitrariness and discrimination in taxation and customs procedures, as well as a lack of professionally trained tax and customs officials, as major business constraints.

March 2014
GAN Integrity Solutions